Floor Talk February 10 (Report Day)

The March corn futures contract settled 1 1/4 cents lower at $4.43. The March soybean futures contract finished 6 cents lower at $13.25. March wheat futures ended 7 cents higher at $5.84 per bushel. The March soymeal futures contract ended $2.50 per short ton lower at $444.20. The March soyoil futures ended $0.17higher at $38.73. In the outside markets, the NYMEX crude oil is $0.15 per barrel higher, the dollar is lower and the Dow Jones Industrials are 49 points lower.

Mike

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At mid-session:

The March corn futures contract is trading 2 cents higher at $4.46. The March soybean futures contract is 5 1/4 cents lower at $13.26. March wheat futures are 8 1/2 cents higher at $5.86 per bushel. The March soymeal futures contract is trading $3.20 per short ton lower at $443.20. The March soyoil futures are trading $0.30 higher at $38.86. In the outside markets, the NYMEX crude oil is $0.42 per barrel higher, the dollar is lower and the Dow Jones Industrials are 19 points lower.

Mike

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REPORT REACTION:

--Sal Gilbertie, Teucrium Trading, says today’s WASE report surprised some market players with the reduction of United States ending corn inventories by 150 million bushels due solely to increased expectation of corn exports from the US. "The increase in year on year usage estimates for both course grain and oilseeds continues to reflect both good oilseed import demand from China as well as steady and even increasing grain demand from the rest of the world. Demand expectations for U.S. wheat are also raised as foreign sources of wheat become less competitive. Overall the report sets a starting baseline for corn supplies in the 2014-15 growing season slightly below what the trade had anticipated while confirming quite healthy global demand for all grains and oilseeds."

--Jack Scoville, PRICE Futures Group vice-president, says "USDA does not want to move SBS ending stocks estimates below 150 unless they have to. That means we better stall out the demand soon. But, USDA took the increased export demand out of additional imports and residual. Kind of a bookkeeping thing but not the headline bullish number they were looking for. I think that is the reason we are selling off. Better weather in South America and ideas of bigger production in the coming year from the outlook conference might mean we are near a top. Plus no stops up near the 1340 march are when we went there, not super bullish

Corn and wheat had the bullish demand and ending stocks estimates. It is not so much that the demand went up and the ending stocks went down, but the magnitude. The 150 mm bushel change is a shock especially for wheat where our competition is said to be so strong. Reflecting the brazil demand and maybe some switching in demand from Canada. The corn data I think implies that prices got cheap enough plus with all of the Arg and Ukraine problems we can do lots of fill in business. So I look for beans to lose to grains over time," Scoville says.

--Dustin Johnson, eHedger.comanalyst says, "The US numbers were the biggest report surprise. The USDA is projecting corn carryout below 1.5 billion this year and that caused a rally to new highs in 2014. The increase of 150 million bushels in export demand is something that could change before the year is over but for now many traders are looking at this report for direction. This is one of the largest increases to export demand in February WASDE history.

Soybean exports were up 15 million bushels but residual was down 10 and imports were up 5. Exports were expected to be higher and there was a lot of air under the market. Even though this was viewed as bearish the tug of war between large South American production and tight US supplies will likely continue into summer.

Surprisingly wheat was well under estimates after a sharp increase to exports. Wheat has been the weakest product on the board and has a lot of air above the market to retrace it's recent losses," Johnson says.

--"USDA raised corn exports by 150 million bushels dropping ending stocks to 1.481 billion bushels. The US soybean balance sheet was left the same but saw a hike of .5 MMT in SA production. Still untouched though is the feed number which still towers over 2012/13 usage by 22%. This has yet to be addressed," Mike North, Senior Risk Advisor for First Capital Ag.

The March corn futures contract is trading 1/2 of a cent lower at $4.43. The March soybean futures contract is 3 1/2 cents higher at $13.35. March wheat futures are 1 1/2 cents higher at $5.79 per bushel. The March soymeal futures contract is trading $1.30 per short ton lower at $447.70. The March soyoil futures are trading $0.42 higher at $38.98. In the outside markets, the Brent crude oil is $1.66 per barrel lower, the dollar is lower and the Dow Jones Industrials are 1 points lower.

The higher-than-average temperatures registered in Londrina, northwest of the state of Paraná in Brazil, have generated losses of over 45 percent of the soybean harvest in the region, according to a report from the Agronomic Institute of Paraná. The harvest was anticipated in order to avoid more losses. The last rain in Lodrina occurred last January 25th. In January, the average precipitation for the region is 8 inches, but it just rained 5.5 inches in the month. On the other hand, corn producers were not affected by the drought because they have harvested before.

Re: Floor Talk February 10 (Report Day)

I think they are, for corn and soybeans. Separately, I just had a short conversation with a corn pit trader, while he was in the pit. He is saying that if the March corn contract can finish above $4.49 3/4, then the funds will buy the March contract. Why? Because they are mathematicians. They have covered their shorts. So, if they buy the March.

He is also saying that if Dec. corn gets to $4.70-$.80, he would be a seller, as a farmer.

What he is confused about is the fact that March-May spread is tight (5¢) with a huge carryover. Why?

Re: Floor Talk February 10 (Report Day)

Hey C-X-1 - What did this crossbred , gaptooth , hillbilly tell you the other day ?? Beans - 150 ?

They kept it the same - for the average - yes exports are great BUT they are planning on useage going down once we get into the warmer months and Cancellations down the road . Anyway thats my cent and halfs worth .

Re: Floor Talk February 10 (Report Day)

The bean number is laughable........looks like the basis will be doing the work.......and we will have another basis cliff in soybeans later on......I doesn't matter if the USDA adds, subtracts, multiplies, or divides.........they keep coming up with the same number.......

Re: Floor Talk February 10 (Report Day)

Beans come down due to Canadian imports. I can believe the story they are telling. Basis is crazy, but once you take it to America it's cheaper than doemestic, or easier to get... Corn is goin 4.70 here too... So maybe Canada will get more export? Beans are 15/bu right now!!

Big bean acres next year here. Could add to imports? as long as dollar is good.

It's funny that everyone writes Canada off and now it's thrown the wrench in partially on this report.

Re: Floor Talk February 10 (Report Day)

i may not be a farmer, but i ain't too stupid - it's too early in the year to change anything..we could have a gazillion bushels booked for export and "nothing to figure", i'm speculating is Mr. Menzies take.

i'm with rt, it is laughable - so what WASDE is sayee-ing is US is going to have net cancellations of at least 125 million bu. from now till Sep...and every week you see ANY + export #'s, just add that to the amount that will be canceled by mktg yr's end...